Prior to Covid-19, America was widely considered to still be climbing out of a recession which was a great reason for renting, but there were also other reasons that had more U.S. households renting than at any point in the last 50 years, according to a 2017 Pew Research Center study.
For instance, Millennials, with a reputation for job-hopping, felt the flexibly of renting as opposed to owning suited their lifestyle and propensity to move often. In fact, when surveyed pre-pandemic they said they had no immediate plans to buy.
Gen Xers, a group hit hard by the Great Recession, rented in large numbers as it was more affordable. Even baby boomers, were renting in very high numbers as there was a lot of divorce. In fact, divorce doubled in 2017, and the recently divorced preferred renting a modern, urban apartment as a change from home ownership.
Well that was then.
Welcome To Now
In what seems overnight, the demand has shifted and we are in what some experts call a housing market boom. Why the shift? Well like everything else, it’s never one thing, but the pandemic is definitely the chief catalyst.
Health concerns are absolutely a factor. Renting in luxury high rise rental buildings with shared amenities has definitely decreased. Social unrest and lockdowns have made it a less attractive option.
Now with travel restrictions, working remotely, and in some cases on line school for kids have all contributed to people wanting to have their own larger space to customize to their needs. And let’s face it, the needs are great, and today’s demands on the home are many.
The coronavirus pandemic has clearly moved the rent-versus-buy decision back toward homeownership. According to the National Association of Realtors, a recent report indicated that homeownership rates dramatically increased during the pandemic.
Low interest rates are also a contributing factor. In fact, in 2020 mortgage rates hit a 10th record low which served to further the housing buying boom.
The conventional wisdom still rings true. Typically, buying a home is a good investment. CoreLogic ® just released their Home Equity Report.
With the following details:
- Home prices were up 4.3% in the past year with more gains predicted to come over the next 12 months
- Overall equity for homeowners with mortgages rose 6.6% over the past year providing additional insulation against pandemic impacts
- The number of mortgaged properties with negative equity decreased by 15% in the second quarter of 2020 to 1.7 million or 2%
At the end of the day, buying a home is a huge decision in the best of times, but owning a tangible asset like a home is still considered a safer investment than the stock market.
Whether you are looking for your first home, or a different home with more space for you family’s needs, \ Chatel Group would love to help you find exactly what you are looking for. They often can present you with possibilities that you had not previously considered, and talk you through all the possibilities so you can make an informed choice. Contact them today for a great experience on your real estate journey.